What If They Are More Powerful? Protecting Yourself

Posted by Beetle B. on Thu 09 June 2016

Much of the material with the tag gty comes from Getting To Yes.

If you are trying to make a deal that is very important to you, it is natural that you may be accommodating in order to close the deal. Resist the urge.

The Costs of Using A Bottom Line: Bottom lines protect you from this urgency, but they have their downsides. They are similar to taking a position, and limit the creativity in coming up with other solutions.

However, if you are part of a coalition (e.g. of farmers), it can be useful to agree on a bottom line so that the other party does not break you up by giving different offers to individuals in the coalition.

Know Your BATNA: Understand that the BATNA is not the bottom line. It is what you will do if there is no agreement. There is a difference!

The Insecurity of an Unknown BATNA: You must think carefully in detail about your alternatives.

Beware thinking in the aggregate, where you have multiple alternatives. The sum of their aggregates may seem better than any option, but likely you will pursue only one choice. As an example, you may say to yourself, “If this deal does not work out, I have 5 different alternatives”. When you have many alternatives, it may seem you are in a good position, and the deal you are trying to make may not seem so important. However, compare only with the best alternative option. It doesn’t matter how many you have.

Another thing to watch out for: Do not be too optimistic about what will happen if there is no agreement.

Formulate a tripwire: Consider coming up with a far from optimal solution that is still better than your BATNA. If the proposal is a bit less than the trip wire, become cautious. As an example, give your lawyer the guideline not to sell below a certain price, but to consult you first.

Making The Most of Your Assets

The Better Your BATNA, the Greater Your Power: Negotiating power isn’t determined by power or wealth but by how attractive your BATNA is. Always keep this in mind when dealing with a seemingly formidable entity.

Develop Your BATNA:

  1. Invent a list of alternatives.
  2. Improve the more promising ones and make them practical alternatives.
  3. Select the one alternative that is the best.

An example of a poor BATNA: Decide you will look in Chicago for a job if the current deal fails.

A better BATNA: Actually get a job offer in Chicago.

Disclosing your BATNA can be beneficial or risky (the latter if they think your BATNA is better than it is).

Consider the Other Side’s BATNA: Try to think of the other party’s BATNA. If their BATNA is great, you can try to change their BATNA (e.g. if their BATNA involves building something, make the process of getting a permit difficult).

If both parties have great BATNAs, you may realize it is preferred to an agreement. Then cease the negotiations.

When The Other Side is Powerful

Don’t try to match their power. The more powerful they are, the more you should try to insist on principles.

tags : negotiations, gty